Shareholders sue over Google’s handling of sexual...

1of2New shareholder lawsuits against the Alphabet board accuse executives and directors of mishandling sexual harassment claims at Google. The misconduct claims prompted a company-wide walkout last November, including in San Francisco.Photo: Jessica Christian / The Chronicle 2018

2of2Claims of sexual misconduct against Andy Rubin, the creator of Google’s Android, are the subject of the suits. Rubin has denied the accusations, which were made public in a New York Times investigation.Photo: James Tensuan / Special to The Chronicle 2017

Shareholder lawsuits filed this week against Google parent company Alphabet accuse executives and directors of long permitting a “toxic work environment” and mishandling sexual harassment and misconduct claims over the years, denting its reputation and hurting potential business.

One suit calls for corporate governance reform at Alphabet, urging it to add more board members, strengthen internal controls concerning sexual harassment and eliminate the use of non-disclosure agreements, which are criticized for keeping under wraps instances of sexual misconduct or assault.

“We think this is saying to the board of directors ... ‘You have an affirmative obligation to do the right thing,’” said Ann Ravel, an attorney representing a shareholder in one suit. “‘You have an obligation to protect your women employees and not just relegate them elsewhere if they get in the way.’”

Alphabet did not immediately respond to a request for comment, and has not responded in court.

The suits, filed Wednesday and Thursday in San Mateo Superior Court, rehash allegations of sexual harassment and discrimination made in a New York Times investigation, citing three dozen unnamed current and former employees. That article brought to light hundreds of millions of dollars paid in exit packages to executives, including Android creator Andy Rubin, who were accused of sexual misconduct. Backlash was swift. One week later, 20,000 Alphabet workers staged a global “Google Walkout” in protest.

Rubin, who went on to found Essential, denied in a statement to the Times that he had been told of any misconduct at Google and said he left on his own terms. He is not a target of the suits.

The suits are among the first of what are called shareholder derivative actions filed against Alphabet in the wake of its “#MeToo” moment, the attorneys for the plaintiffs said. The suits say Alphabet’s board has protected some of the company’s highest-paid executives from scrutiny at the expense of shareholders, employees and users. One suit knocks Google for hiding from shareholders the “true reasons” for the executives’ departures.

“We think Google, or Alphabet, can really do a better job of looking out for shareholders and its employees,” said Julie Goldsmith Reiser, an attorney representing pension funds in the litigation. The suit doesn’t specify a dollar amount for damages.

Since the Times report, Sundar Pichai, Google’s chief executive officer and a member of Alphabet’s board, has made some changes to the company’s handling of sexual harassment and misconduct claims. A new policy includes updating the channels where employees can report incidents, providing them with counseling and special accommodations as needed and making arbitration optional for sexual harassment claims.

“This is an area where we need to continually make progress and are committed to doing so,” Pichai wrote in a memo to employees.

Melia Russell is a business reporter at The San Francisco Chronicle, where she covers tech culture and labor issues in Silicon Valley. Prior to joining The Chronicle, she started as an intern at Business Insider in 2013 and spent five years at the digital news site. Melia has degrees in magazine journalism and information management and technology from Syracuse University.